NZD/USD Forex Technical Analysis – Selling Pressure Could Accelerate Under .6733 with .6702 the Next Target Price

The New Zealand Dollar is inching higher early Friday after hitting its lowest level since December 21 the previous session. The tight trading range suggests a squaring of positions ahead of the U.S. Non-Farm Payrolls report, due to be released later today at 13:30 GMT.

Despite the slight rise, the Kiwi remains under pressure due to a drop in demand for riskier, commodity-linked currencies. That souring in demand for the higher-yielding currency is being fueled by speculation that a U.S. rate hike could come as early as March, while the spread of the Omicron variant has dimmed the outlook for economic growth.

At 06:12 GMT, the NZD/USD is trading .6755, up 0.0007 or +0.11%.

All eyes are going to be on the U.S. Non-Farm Payrolls report later in the session since the labor market’s performance will be one of the factors the Fed will be using to set the timetable for its first and subsequent rate hikes. Traders are estimating the economy added 426K new jobs in December.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6733 will signal a resumption of the downtrend. A move through .6857 will change the main trend to up.

The minor trend is also down. A trade through .6837 will change the minor trend to up. This will also shift momentum to the upside.

The NZD/USD is trading on the weak side of a minor Fibonacci level at .6761 and a short-term 50% level at .6785.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Friday is likely to be determined by trader reaction to .6761.

Bearish Scenario

A sustained move under .6761 will indicate the presence of sellers. If this creates enough downside momentum then look for a test of yesterday’s low at .6733.

Taking out .6733 will indicate the selling pressure is getting stronger. This could trigger a further break into the pair of main bottoms at .6702.

Taking out .6702 could trigger an acceleration to the downside since the nearest support is the November 2, 2020 main bottom at .6589.

Bullish Scenario

A sustained move over .6761 will signal the presence of buyers. This could trigger a surge into .6785. Overtaking this level will indicate the short-covering is getting stronger with .6795 the next target price.

Overcoming .6795 could extend the rally into the minor top at .6837, followed by the main top at .6857.